Finmeccanica Whistleblower Faces Corruption Probe

Mar. 27, 2014 - 03:45AM
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Lorenzo Borgogni, former head of external relations at Finmeccanica, was arrested on charges related to development of a system to electronically trace industrial and agricultural waste in Italy, which was established after areas near Naples were used by the local mafia for dumping hazardous materials. (Agence France-Presse)

ROME — A former Finmeccanica manager who blew the whistle on alleged kickbacks in a deal to sell helicopters to India has himself been placed under house arrest in connection with a separate probe into alleged corruption at the firm.

Lorenzo Borgogni, formerly head of external relations at Finmeccanica, is being investigated by magistrates in Naples on suspicion of corruption related to a waste disposal contract won from the Italian government.

Borgogni, who left the company in 2011 over alleged ethics violations, has given prosecutors details of alleged kickbacks offered to Indian officials to secure the purchase of the AW101 helicopter.

India purchased 12 of the helicopters for €560 million (US $771 million) in 2010, but canceled the deal after magistrates sent Giuseppe Orsi — former boss of Finmeccanica helicopter unit AgustaWestland — to trial for his role in the alleged corruption.

Orsi, who denies the charges, is currently on trial in Italy.

Borgogni’s arrest is related to the Sistri system developed to provide electronic tracing for industrial and agricultural waste in Italy, which was set up after areas near Naples were used by the local mafia for dumping hazardous waste.

Finmeccanica unit Selex Service Management was handed a €400 million contract in 2009 to design and manage the Sistri system, which has yet to be completed.

Magistrates suspect that large slush funds were created through false invoicing between Selex Service Management and other companies related to the project in order to pay bribes, with some of the proceeds ending up in the coffers of Italian political parties. Investigators also allege that accounts were set up in Switzerland as part of the scheme.

Borgogni was placed under house arrest in connection with the probe along with Stefano Carlini, who is a former Selex Service Management manager, and two entrepreneurs. Sabatino Stornelli, the former head of Selex Service Management, was arrested in connection with the investigation last April, and has since cooperated with magistrates.

Finmeccanica has said it has brought a civil action seeking damages against “certain suppliers” connected to the Sistri case.

Borgogni is due to be questioned by investigators on April 1.

Magistrates have also placed former Finmeccanica CEO Pierfrancesco Guarguaglini under investigation for his alleged role in corruption connected to Sistri. On March 25, Guarguaglini issued a statement denying any involvement in the alleged corruption.

Guarguaglini has previously been investigated for false accounting at Finmeccanica. That probe played a role in his resignation as chairman in 2011, but he was later cleared of all suspicion.

Guarguaglini had been placed under investigation following claims made by Lorenzo Cola, a consultant who worked with him. Cola has since been convicted of money laundering in a deal involving Finmeccanica.

This month, Italian magistrates recouped €6.5 million from a Swiss bank account belonging to Cola. ■